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Walking Off the Wall Street Bears: Confessions of a New York Consumer
Consumer
spending drives approximately two-thirds of the United States economy,
so it follows that Wall Street will become nervous if people stop
buying all the stuff they would like to have but don't need. Thus, a
quote,
"The other big
concern is where is the consumer. Starbucks released earnings, and they
said they ratcheted down estimates because of the softening consumer
market. That's what the market does not want to see." - Andre Bakhos,
president of Princeton Financial Group quoted in a story by Reuters and
published in the November 16, 2007 edition of the NYT.
I
hate to say it, but the softening of the consumer market usually begins
with me. As a New Yorker who wants to support the local economy, I
often feel guilty that I do not shop enough, especially for clothes. I
am not a fashion plate, content as I am to walk the streets in last
year's Ralph Lauren jeans or an Ann Taylor suit or, more typically,
several interchangeable immortal outfits from a decade ago. When I went
out this morning in the cold New York rain, I put on a classic
full-length raincoat, a red scarf and a cowboy hat, glanced at myself
in the mirror, and started reciting lines from Deadwood.
My
father and mother shaped my consumer habits early, but in often
conflicting ways. When I asked for something new, my father would
respond with his own question, "Do you want it or need
it?," a sticky inquiry that stayed with me all my life. My mother, on
the other hand, would answer this question by deciding that I needed
whatever clothes looked adorable at Neiman-Marcus.
In the end, I
did not become a prolific shopper. I ask first if I need it, and then
when I do make a purchase, I buy something of quality that I think will
take me through a recession.
Image: Wall Street, looking east.
Walking Off the Wall Street Bears: My Fundamentals Are Deteriorating and My Personal Expectation Index is Partly Cloudy
I
have recently started reading the business sections of newspapers and
online news sites every single day. This is a startling turn of
developments, and I have just come to understand why.
Before I
lived in New York, I rarely read the business section of a newspaper, I
think, because I could take the pulse of the economy just by looking
around. In a time when I actually owned a vehicle and a single-family
house, I could easily visualize downturns and upswings in the economy
by driving my car through neighborhoods and to stores. I could see how
quickly the SOLD signs appeared on houses on the market, and I could
watch new activity, or lack thereof, in new home construction. The
health of the housing market could be quickly assessed by the length of
the line at the cash registers at Lowe's or Home Depot.
I could
often extrapolate how other middle class energy consumers like myself
reacted when I filled the gas tank of my car. When I lived in Texas or
the Upper Midwest or the Deep South, I would occasionally pop into
Wal-Mart in order to save money on dog food, craft supplies, allergy
medicine, a T-shirt, a bottle of wine, a string of chili pepper lights,
and some tamales all at once.
That was then. Now is now, and
walking down Wall Street, as I pass the Bank of New York, the Stock
Exchange, the House of Morgan, Federal Hall, the new branch of
Tiffany's, new multi-million dollar condominiums, and offices for
investment bankers, I realize nothing bears physical resemblance to the
visual culture of the average American consumer, except for the
Downtown Pharmacy and Starbucks. Maybe at this last place, a so-called
"third place," I can put down the newspaper and forecast the economy
just by reading the coffee grounds.
Image: Lower Manhattan, as seen from the Brooklyn Heights Promenade. Spring 2007. WOTBA.